Skimming is a pricing strategy adopted by companies when a product is introduced in the market for the first time. In this pricing strategy, the marketer sets a high price for the product at entry level. Further, the firm may lower price in the future to attract more price-sensitive segment of the target market. Reduction in price will be done only after the demand of the customers is first satisfied. The strategy is very useful when customers are willing to buy the product at high price and when there is virtually less or no competition based on price.
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